One of the greatest challenges of the 21st century is to obtain an ecological source of transport fuels. The production of biofuels based on feedstock obtained through the exploitation of arable land translates into an increase in food prices and progressive degradation of the environment. Unlike traditional agricultural raw materials, algae are a neutral alternative in many respects. They can even be obtained as waste from polluted water reservoirs. One of the manifestations of the deterioration of surface waters is the eutrophication of water reservoirs, which leads to an increase in the number of algae. Algae reaching the shores of water reservoirs can be used as a raw material for the production of biofuels, including biogas, bioethanol and biodiesel. However, it should be remembered that water blooms are a periodic phenomenon, appearing in the summer months. Therefore, in order to ensure the continuity of obtaining energy from biomass, it is necessary to conduct algae cultivation in artificial open tanks or photobioreactors. Accordingly, this review first briefly discusses the properties and possible applications of different species of algae in various industrial areas, and then describes the process of eutrophication and the presence of algae in eutrophicated reservoirs. Technologies of algal cultivation in various systems and technologies of algal biomass pretreatment were critically discussed. Various methods of obtaining biomass from algae were also reviewed, and the process conditions were summarized. Biofuels of various generations and raw materials from which they are obtained are presented in order to determine the possible future directions of development in this field. Parameters affecting the selection of algae species for the production of biofuels were also examined and presented. Overall, algal biofuels still face many challenges in replacing traditional fossil fuels. Future work should focus on maximizing the yield and quality of algae-derived biofuels while increasing their economic viability.